Corporate Finance

Anheuser-Busch InBev plans historic takeover of SABMiller, worth up to $276billion

Anheuser-Busch InBev (AnBev), the world’s largest brewer, has set out its intention to make an offer to acquire SABMiller to create a group with a combined worth of about $276 billion, according to Wednesday’s prices.

Anheuser-Busch InBev (AnBev), the world’s largest brewer, has set out its intention to make an offer to acquire SABMiller to create a group with a combined worth of about $276 billion, according to Wednesday’s prices.


Approach from market-leader AnBev confirmed

USA- based AnBev, which holds around 20% of the global market share, said that it had approached competitor SABMiller’s board about a “combination of the two companies.” AnBev has been interested in the acquisition for some time and makes at the end of year in which its competitor slightly under-performed. If it goes ahead, the merger would be the biggest in the brewing industry and one of the largest ever across all sectors.

 

Share prices for both AnBev and SABMiller benefit from announcement

SABMiller confirmed that AnBev had informed them that it “intends to make a proposal to acquire the company,” but that “no proposal has yet been received.” The British firm, recognized for beers such as Fosters, Miller and Grolsch, saw its shares surge by around 20% on the London Stock Exchange after the announcement, whilst those of AnBev increased by about 6%.

 

Expansion on the horizon

The lucrative deal would provide AnBev with greater exposure in the booming Latin American market, as well as openings in Africa, where SABMiller has been expanding over the past few years.

Should this deal go ahead, it would completely eclipse previous mergers in the food and beverage industry, including the $46 billion deal between Kraft Foods and Heinz (July 2015), as well as the $52 billion merger that brought AB and InBev together (2008).

 

Photo: Dorisall

F. A. E. M.

Read more regarding global M&A in our 2015 Report of International Corporate Finance (publication September 2015)

 

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